The Tick can be used as a short-term indicator while day trading. Although it represents the number of stocks ticking up minus the number of stocks ticking down on the NYSE, it can be used as a barometer for stocks trading on all US Exchanges.
For example, if the Tick reads +200, then 200 more stocks on the NYSE are ticking up then are ticking down. This is obviously a bullish signal. If the Tick should read -354, then we understand that 354 more stocks are ticking down then are ticking up. This is a bearish signal. In addition to the actual "number" reading of the Tick, one should also pay attention to how the Tick is trading in relation to it's support and resistance. Be sure to watch it on a 5 or 15 minute chart in realtime. If you don't have access to realtime charts, you can take a look at these packages of stock trading software. The Tick also scrolls by during the "CNBC Market Summary" section of the CNBC ticker.
When the Tick remains positive on the day bullish momentum can continue. When the Tick remains negative, bearish momentum can continue. However, if the Tick should rise over +1000, the market will likely soon reverse because it has become over bought. The reverse is also true. If the Tick should fall below -1000, the market will likely reverse because it has become very oversold.
If you happen to be long when the Tick begins to rise over +1000 or short when the Tick begins to fall below -1000, you need to begin to lighten up on your positions or close them entirely in anticipation of a reversal.
To be extremly careful while trading, only enter longs when the Tick is above zero and shorts when the Tick is below zero.